THREE new stories:
# ONE for news page (Hoffa
editorial on taxing health care
# TWO for views page (WSLC
comments about 2010
# THREE for politics page (HC
Debate on taxing health care
plans from Washington Post).
NEW TEASER LINEUP:
HC Tax Would Devastate Middle Class (NEW, 18)
YRCW Bond Exchange Successful (SAME BUT NOW, 16)
Last Year’s Financial Unfairness (SAME, 16)
Bill to Close Tax Loophole Good (SAME, 16)
Don’t Tax Health Care Plans (SAME, 16)
KILL: NOTE – IT’S THE “OUTMODED” 12/28 STORY, NOT THE
OLDEST 12/14 STORY…
“YRCW Bond Mess Investigation Needed”
HC Tax Would Devastate Middle Class
(January 11, 2010) “The last thing the American middle class needs
right now is a big new tax on health insurance plans,” wrote IBT General
President Jim Hoffa. “Many working people are now poorer than they were
10 years ago. Middle-class families earned less in inflation-adjusted
dollars than they did in 1999. Homeowner wealth dropped by $11 trillion
in the housing bust, and a staggering one-quarter of them owe more on
their mortgages than their homes are worth.”
Read More Inside
TEASER/NEWS PAGE STORY.
PIX: CARTOON, GRIM REAPER
During the debate of the separate Health Care Reform Bills in the
House and the Senate, nearly everyone was focused on the lack of
a strong optional public insurance plan for the uninsured in the
House proposal, and the lack of any option plan for the uninsured
at all in the Senate proposal. Now the approval process has
reached the time when the two separate proposals must be
combined in a new compromised House-Senate Bill. Well, it turns
out something else has entered the picture in the meantime
through a side door — the idea, voiced in the Senate, to tax the
health care insurance plans of the middle class. This anti-union
idea appeared on the Senate playing field while “the people”
weren’t paying much attention. Grim Reaper Senator Joe
Liebermann may be visiting “insured” folks soon, too, if this idea
gets supported in the House also and somehow becomes law.
IBT View of Taxing Health Care:
CONGRESS, DON’T TAX OUR
HEALTH INSURANCE PLANS
TEAMSTERS GENERAL PRESIDENT VOICES THE UNION’S
CONCERNS IN AN EDITORIAL COLUMN PUBLISHED BY
THE HUFFINGTON POST
By JIM HOFFA, International Brotherhood of Teamsters General
(January 11, 2010) Last week, Jim Hoffa continued speaking out against
the idea of taxing workers’ health care plans. His comments were posted
on The Huffington Post website and on the IBT website. His editorial
MIDDLE CLASS AMERICANS DON’T WANT
AND CANNOT AFFORD A BIG NEW TAX
WASHINGTON, D.C. — The last thing the American middle class needs
right now is a big new tax on health insurance plans.
— Many working people are now poorer than they were 10 years ago.
Middle-class families earned less in inflation-adjusted dollars than
they did in 1999. Homeowner wealth dropped by $11 trillion in the
housing bust, and a staggering one-quarter of them owe more on
their mortgages than their homes are worth.
— But the U.S. Senate wants to further impoverish the American
middle class. As many as 30 million working people will pay a
massive new tax in the first five years of the Senate health care
— The House, on the other hand, has the right idea. It pays for health
care reform with a small surtax on those who benefited most from
changes in our tax code – people who earn more than $500,000 a
year. The House also requires most employers to provide health
care for their workers.
We support the House plan because it really does reform health care. It
will lower costs, deliver more health care and cover more people. It will
level the playing field, taking away the unfair cost advantage enjoyed by
employers who don’t offer health insurance.
The Senate plan, on the other hand, would punish employers who already
provide health care by taxing their health insurance plans. A recent survey
found that 87 percent of employers said they will cut benefits if reform
increases their costs, and 86 percent said they would pass the additional
costs on to workers, according to Towers Perrin.
That isn’t cost control. It also isn’t fair and it isn’t reform.
The Senate’s proposed tax has been mischaracterized as a tax on “Cadillac
plans.” That ignores the very real reasons some health plans are
expensive. One big reason is that insurance companies take excessive
profit, not that they offer too much care.
Many, many people are in expensive plans because they are old or sick or
work in dangerous professions. Plans with more women workers have
higher costs. Small businesses often have to pay more.
The tax would apply to one-fifth of all employers in 2013, the first year
that health reform takes effect. More and more people would get hit each
year after that. The threshold for taxable plans is indexed for inflation,
which doesn’t rise as fast as health care costs.
Here’s an example of how it would work for federal workers covered by
the Blue Cross/Blue Shield standard plan. Single people in the plan will
immediately pay an average of about $1,600 more per year for 10 years.
Families will get hit in the third year, paying an average of about $2,000
more per year for 10 years.
— By 2022, the Blue Cross/Blue Shield standard family plan will cost
$5,500 in taxes per worker. Single people could pay as much as
$3,500 per worker.
— Middle-class families in private and public sector jobs, union and
non-union alike, will be hit hard by this tax on health care benefits.
— We want to work with the Senate, the House and the administration
to achieve real healthcare reform. Adding to the financial burden of
middle-class wage earners isn’t the way to do it.
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CHECK IT OUT LINEUP
(TWO NEW ONES AT TOP … TWO
OLD ONES TO KILL.)
01/08/10 — Olympia Politics
01/07/10 — HC Plan Tax Idea
12/29/09 — Airline Security
12/29/09 — HC Debate Resumes
12/23/09 — Drug Industry $$$$
12/22/09 — Cybersecurity Chief
December Retirees’ Newsletter
Visit Local 174 Teamster Store
12/18/09 — HC Deadline Probs.
12/16/09 — U.S. Innovation Risk
TWO: VIEWS PAGE ENTRY.
PIX 1: bloody water in Olympia
This Washington State Labor Council photo pretty well shows how
the atmosphere in Olympia is as the 2009 Legislative Session is
about to begin.
PIX 2: ART, WSLC LEGISLATIVE AGENDA
Click on this thumbnail to view the full-size PDF of the Washington
State Labor Council’s 2009 Political Agenda.
Washington State Labor Council
THERE’S BLOOD IN THE WATER
STATE 2010 LEGISLATIVE SESSION BEGINS TODAY,
JANUARY 11TH, AND THE WSLC HAD SOME COMMENTS
ABOUT IT IN THEIR LEGISLATIVE REPORT JANUARY 8TH
(January 8, 2009) Believe it or not, despite all the doom-and-gloom you've heard abou
the 2010 session of the State Legislature that begins Monday, and the $2.6 billion
projected budget deficit legislators face, not everyone is upset. In fact, there are some
who are very excited and view this session as a great opportunity — one they've been
waiting on for decades.
Most of us see the devastating, unconscionable harm that another
all-cuts budget would cause.
We are the people who value public safety, public health, public schools,
public roads, public transit and other public services intended to protect
our society's most vulnerable. We are the people (and the children and
grandchildren of people) who fought for safety nets for workers who lose
their livelihoods due to layoff or injury. We are the people who understand
that all these public services cost money. And we believe it would be
morally reprehensible to eliminate those services at the precise time they
are needed most: during an economic downturn when people are
But there are those who see this crisis as something else entirely:
an opportunity to make more money.
Some of them sit in corporate boardrooms and at the computers of the
think tanks they finance. They think sacrifice is for chumps. They know
that the best time to increase private profits by cutting wages, benefits
and regulatory costs is when unemployment is high, working people are
desperate and the government is broke.
They know that blood is in the water in Olympia and there's never been a
better time to eliminate government regulation of their businesses. They
know it's open season on the unemployment and workers' compensation
systems and anything else they declare to be "uncompetitive" or a "job-
killer." They know the lure of privatization and its false promises of cost
savings have never been more powerful. Their greed and hubris is best
exemplified by the fact that, despite this historic budget crisis, they are
seeking even more corporate tax breaks — and just might get them.
And then there are the anti-government ideologues, those who
want government to either "wither on the vine" or "drown in the
bathtub" — depending on how well their anger-management
classes are going. They want to starve state programs into
ineffectiveness and undermine public confidence in government.
They demonize public employees as overpaid bureaucrats who
don't deserve their luxurious wages and benefits. They seek to
The Washington State Labor Council and the rest of the state's union
movement understand the importance of unity in the face of this kind of
adversity. We will demonstrate that unity by advocating for all working
people — unionized or not — and especially the real victims of this
recession: the unemployed. We will show unity with public employees, our
neighbors who police our streets, put out our fires, teach our children and
protect them from abuse, make our jobs safe, tend to our wounds and
save our lives. We will advocate for shared sacrifice to preserve necessary
state services and our quality of life here in Washington. And that will
mean more revenue from all who can afford it, including businesses.
How will we do that? (Thanks for asking.)
WSLC’S LEGISLATIVE AGENDA: JOBS, JOBS,
The Washington State Labor Council’s 2010 legislative agenda — at both
the state and national levels — is focused on jobs, jobs, jobs.
Creating jobs. Retaining jobs. Strengthening jobs.
— The WSLC's agenda includes creating jobs by investing in public
infrastructure, environmental clean-up and other emerging green
industries; maintaining jobs by eliminating or suspending corporate
tax exemptions and avoiding the closures of state institutions that
protect public safety and health; and strengthening jobs by
empowering more workers to form unions, if they so choose.
— But while we are mindful that quality jobs will lead us out of
recession, the WSLC and its more than 500 affiliated unions also
recognize the moral imperative of protecting and strengthening the
safety nets that the victims of this recession need to survive; we
must raise revenue to protect our families’ health and safety; and
we must make sure our state is prepared to effectively implement
national health care reform.
— And as always, our agenda will include active support for our
affiliated unions' individual legislative priorities and support for
coalition efforts in such areas as the passage of a Homeowners Bill
of Rights and strengthening our public initiative system.
Our detailed legislative agenda is available here: PDF (printable).
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THREE: POLITICS PAGE ENTRY.
CARTOON: old 2009 and new 2010.
It’s only mid-January, and already, Young 2010 has been dealt a
blow that would have turned some of his hair white if he had hair
yet, which he doesn’t. It’s the idea running through the Senate
right now, of taxing the Health Care Plans of the middle class. And
that, of course, includes unionized workers.
Teamsters News Link:
HEALTH CARE REFORM BILL’S
PROPOSED TAX ON HIGH-COST
PLANS RAISES QUESTIONS
(January 7, 2009) With Congress on the verge of imposing a new tax on
high-cost health insurance plans, skeptics continue to raise questions
about who would be hit hardest and whether health-care spending would
be limited as much as proponents say.
The Senate health-care legislation includes a 40 percent excise tax on
insurance plans worth more than $23,000 per year for a family of four.
When the legislation would go into effect in 2014, only a small fraction of
all plans would be taxed, but more would be captured over time: roughly
a quarter by 2019, collecting about $150 billion over 10 years.
The House legislation instead relies on an income tax surcharge on
families earning more than $1 million. But centrist Senate Democrats are
opposed to the surcharge, and the excise tax has been endorsed by the
White House and many health-care economists, who tout its cost-
Supporters of the Senate provision say it would restore some equity in the
tax system, which exempts employer-provided health benefits while
forcing people who buy insurance on their own to use after-tax dollars. To
avoid the tax, supporters predict, employers and employees would shift to
less-generous plans that would make patients more sensitive to costs,
slowing the growth in health-care spending. Employers, the theory goes,
would put the savings into higher wages.
WHO WOULD BE TAXED?
But as the tax proposal takes on an aura of inevitability, pockets of
skepticism remain, even beyond labor unions, which are often cast as the
main opposition because many union plans would be taxed.
Health analysts recently questioned the assumption that the tax would
target only the most lavish insurance packages, nicknamed "Cadillac
plans." The analysts, writing in the journal Health Affairs, found that some
less-generous plans could be taxed because they are costly for other
reasons. The location of an employer and the type of industry, for
example, have as much to do with the cost of plans as the generosity of
the benefits and the kind of plan. Smaller businesses, especially those
with a preponderance of older workers, tend to have higher premiums, as
do certain industries, including the health-care sector.
The Senate bill would phase in the tax more slowly in some higher-cost
states and exempt a few industries that tend to have expensive plans,
such as mining. But opponents say it is impossible to find a workable way
of targeting the tax so it would spare people whose plans are not
— "It's a very blunt instrument," said former labor secretary Robert
Reich. "It makes far more sense on policy and political grounds to
tax the top 1 percent rather than sweep in so many people that are
paying more for health care, not because they are getting more
health care but because they're older or working for small
— Rep. Joe Courtney (D-Conn.) notes that Obama pledged not to
raise taxes on anyone earning under $250,000 and that he attacked
Sen. John McCain (R-Ariz.) on the campaign trail in 2008 over his
plan to do away with the tax-free treatment of employer-provided
benefits. Pro-Republican groups are already turning the tables by
running ads accusing Democrats of wanting to tax benefits. "It's a
plan that has great political risk for the Democrats," Courtney said.
WOULD IT LOWER COSTS?
Separately, several health-care experts question whether shifting people
into lower-cost plans is the best way to slow spending. It is possible, they
concede, that the tax could move more employees into HMOs known for
more efficient spending. But many markets lack such options.
It is more likely that employers would lower the cost of plans by
increasing deductibles and co-pays, which skeptics say would not
necessarily bring down health-care costs. Most costs are incurred by a
minority of chronically ill patients. And health care is not like other
markets, where consumers can make their own judgments based on
quality and price; instead, patients make most major health-care
decisions based on what their doctors tell them, skeptics point out.
A Rand study from the 1970s found that higher co-pays and deductibles
led patients to limit medically necessary care as much as wasteful care,
possibly leading to more costly health-care needs later.
— "The consumer-directed-health-care crowd argues that with high
cost-sharing, patients will do the only legitimate . . . cost-benefit
calculus — but that surely is nonsense," said Princeton economist
Uwe Reinhardt. "None of these proponents has ever shown that
patients are even capable of evaluating the clinical merits" of
Opponents of the tax say the case for it assumes that the country's high
health-care costs are the result of patients' overuse of care. But, they
note, the country's usage of medical care is by many measures lower than
in other developed countries; it is the price that is so much higher here.
— "The biggest problem we have isn't that we're demanding so many
services, but it's that the type of services we're providing are so
expensive," said Thomas Rice, a UCLA health-care expert.
Some economists also doubt that employers would shift savings from
health care into wages, given how slack the labor market is likely to be for
the foreseeable future.
— Jonathan Gruber, an MIT economist and a leading proponent of
the new tax, dismisses these concerns. Even if the tax hit some
high-cost plans that are not particularly lavish, it would still goad
employers generally to seek lower-cost plans, he contends. "The
argument that because it won't cause efficiency in every case, we
should therefore not do it, is a dumb argument," he said.
Bringing the plans below the tax threshold would require only slightly
higher deductibles, he said, enough to make people more cost-sensitive
but not enough to make them skip necessary care. "If you take people at
the level where they're spending $23,000, that's not skimpy insurance,
and . . . if you raise their co-pays or deductibles, that's not going to
adversely affect their health," he said. "There's literally no evidence out
there that people are going to suffer."
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